On January 3, the National Labor Relations Board (NLRB) issued an order in D.R. Horton, Inc. v. Cuda, concluding that D.R. Horton had engaged in an unfair labor practice by requiring employees to enter into arbitration agreements containing class waivers as a condition of employment. According to the NLRB’s order, in certain circumstances, requiring employees to arbitrate on an individual basis violates Section 7 of the National Labor Relations Act (NLRA), which provides that “[e]mployees shall have the right . . . to engage in . . . concerted activities for the purpose of collective bargaining or other mutual aid or protection[.]” The NLRB rejected the argument that finding an NLRA violation would conflict with the US Supreme Court’s decision in AT&T Mobility v. Concepcion, which held that the Federal Arbitration Act preempts state laws that preclude class action waivers in arbitration agreements, and explained that class arbitration “is not arbitration as envisioned by the FAA.”
The NLRB’s determination is likely to be scrutinized by the courts, either in D.R. Horton itself, in other cases in which the NLRB finds that employment arbitration agreements constitute an unfair labor practice, or in cases where plaintiffs raise the NLRB’s reasoning as a ground for avoiding their arbitration agreements.
Please join a panel of Mayer Brown lawyers for a teleconference discussing what employers should know about the NLRB’s decision, what impact it will have on other companies’ employment arbitration programs, and what companies should do next. The speakers will be:
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